ASX NEWS & VIEWS

Cimic Group Ltd reported strong First Half 2018 Performance

Strong First Half 2018 Financial Performance: Cimic Group Ltd.’s (ASX: CIM) stock skyrocketed by 16.7% on July 19, 2018 after the company for the first half 2018 delivered 12% growth in NPAT to $363 million. The company has witnessed strong revenue growth across all the Operating Companies, as it grew 11% to $6.9 billion. The company has posted the EBIT, PBT and NPAT margins of 7.7%, 7.3% and 5.2% respectively. In the first half 2018, there is a significant rise in cash flow from operating activities of 17% to $724 million; $1.6 billion in LTM. EBITDA conversion rate is of 102% in LTM. The company’s free operating cash flow is of $1.1 billion in LTM. Moreover, CIM has strengthened its balance sheet further and has a strong net cash position of $1.3 billion, up $691 million. The company has strong order book with work in hand of $34.8 billion and Operating Companies’ work in hand is up $2.1 billion y-o-y. There are $80 billion of tenders still to be bid and/or awarded during the rest of 2018; and approximately $330 billion of projects is expected to come in the market in 2019 and beyond, including about $100 billion worth of PPP projects. Additionally, the company has confirmed the guidance for 2018 NPAT, expected to be in the range of $720 million to $780 million, which is subject to market conditions. CIM has declared the half year dividend of 70cps, up 17%, fully franked, to be paid on 4 October 2018. Meanwhile, CIM stock has risen 4.14% in one month as on July 18, 2018 and is trading at a P/E of 19.77x.

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